Denmark has too many trade unions

There are currently 169 trade unions in Denmark, of which one-third have fewer than 1,000 members. This is too many, according to a study published in April 2001, which claims that too much energy is thus expended on rivalry among the unions and internal power struggles, to the detriment of the members and of flexibility at the workplace. The report concludes that enterprises could increase productivity by at least 5% if mergers led to fewer unions, as work tasks could be organised in a more flexible way if demarcation lines were erased.

The structure of the Danish trade union movement, with its large number of unions - a total of 169, of which one-third have fewer than 1,000 members - means the duplication of many tasks for the unions. Many union officials spend their time in meeting each other and organising the framework for activities, instead of engaging in trade union activities which will really be to the benefit of their members. The members receive unprofessional advice, are losing political influence and pay excessively high membership fees, due to factors such as too many staff, including a large number of consultants and experts with open-ended employment contracts. The decision-making procedures should be simplified and the demarcation lines which today determine the type of work that the members of particular union are allowed to perform should become less rigid. The resulting increased flexibility in the work process would increase the productivity of enterprises by between 5% and 10%.

These are among the conclusions of a study carried out by the Employment Relations Research Centre (FAOS) at the University of Copenhagen, on the development of the Danish trade union movement from 1950 to 2000. This analysis forms part of a comparative research project carried out by a network set up under the auspices of the European Trade Union Institute (ETUI), the research arm of the European Trade Union Confederation. The Danish study was published in April 2001 in a new series of papers from the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) (LO-Dokumentation No. 1; 2001)

Trends in structural development

According to the FAOS report, the history of the development of trade union structure in Denmark is that a strongly differentiated structure characterised by a large number of unions has been preserved for many decades only because the weaknesses of this structure have been overcome by a strongly centralised bargaining system, within which negotiations take place either directly through, or with the involvement of, the main organisations (LO in the private sector) or through bargaining cartels (the central organisations in the public sector). The important changes to union structure which have actually been introduced during this period have also, to a significant extent, been the result of the structure of the bargaining system. When radical changes take place in the bargaining structure - leading to conflicts with the existing organisational structures - this also leads to changes in the structure of the organisations.

The developments in the fields covered by four main union confederations - LO, the Confederation of Salaried Employees and Civil Servants in Denmark (Funktionærerne og Tjenestemændenes Fællesråd, FTF), the Danish Confederation of Professional Associations (Akademikernes Centralorganisation, AC) and the Organisation of Managerial and Executive Staff in Denmark (Ledernes Hovedorganisation, LH) - are discussed separately and compared in the report. From an overall perspective, Danish trade union structure is characterised by being very fragmented with a large number of organisations, some of them very small. There are currently 169 independent union organisations, though this is down from the peak of 267 organisations in 1969, indicating that a certain structural development has taken place. It is, in particular, FTF which now has a large number of very small affiliated organisations. Today, FTF has 104 member organisations, of which 23 have fewer than 100 members, while 65 organisations (nearly two-thirds) have fewer than 1,000 members.

Bargaining system plays conservative role

The basic lines underlying the structure of Danish unions have been surprisingly resistant to the pressure for change resulting from technological innovations and changes in the structure of trade and industry, the report finds. The most important instrument in ensuring the survival of the existing organisations has been the establishment of bargaining cartels, which have been able to assume the most important task of the trade unions: bargaining over pay and employment conditions on behalf of their members. This has, in particular, been the method in the public sector, but also gradually in private sector industry. The bargaining cartels initially functioned as a solution to the problem of the many small unions in the context a relatively quickly-established central collective bargaining system, with sectoral agreements concluded at national level. The cartels have since become an obstacle to the continued development of the structure of the trade unions, it is claimed. With the cartels assuming bargaining tasks, there has not been much incentive for changes aimed at adapting union structure to the requirements of external pressure.

In the private sector, the centralisation of the bargaining structure - supplemented by legislation - has led to increased competence being given to the Public Conciliation Service. The Public Conciliator has been given the power to link together the settlements reached within a number of bargaining units and put them to a single ballot of union members for approval. The aim is to ensure an overall solution to a collective bargaining round, in spite of the many small unions and the resulting large number of collective agreements

The study points out that it is mainly the employers - in both the private and public sector - which have pushed through the centralisation of collective bargaining. It has thus mainly been the employers that have created the system which has resolved the problems linked to the existence of many small unions and thus - as a unintended consequence - legitimated the fragmented organisational structure. The bargaining system has thus, the report concludes, assumed a conservative role.

Importance of unemployment insurance funds

Political developments have - in addition to contributing to the decentralisation of the bargaining process - had a centralising effect on union structure, the study finds. In general terms, the continued development of the welfare state has led to shifts in organisational structure, in that it has led to a growth in the number of employees with medium- and higher-level education and thus to a strengthening of FTF's and AC's membership levels in relation to LO. More specifically, it is especially changes in the legislation concerning the unemployment insurance system which have accelerated the process of union mergers and amalgamations. Indeed, according to the report, here is hardly any other single factor which has had a more radical effect.

This applies, in particular, to LO's affiliates. In Denmark, unemployment insurance funds are essentially run by trade unions, which is a decisive factor in the country's high union density level. When legislation introduced new requirements as to the minimum number of members an unemployment insurance fund must have in order to obtain state subsidies, this practically eliminated smaller LO unions - initially those with fewer than 1,000 members and then those with fewer than 5,000 members. This process was completed by around 1985. The reason why the effect was not equally large for FTF and AC is that these, mainly public sector, confederations had been given the possibility to establish cross-sectoral unemployment insurance funds as an exception to the statutory rule that such funds should mainly be established on occupational lines.

The greatest obstacle to more fundamental structural changes lies within the trade unions, the report concludes. It refers to the inherent "conservative trend" in complex social organisations and institutions. On the one hand, this conservative trend should be seen in the context of the organisations' established attitudes and values, which are difficult to change; on the other hand, it should be seen as an institutionalisation of power and resources. Large and long-established administrative and political apparatuses create their own inertia, purely as a result of the fact that structural changes will threaten the position of a number of people and groups.

Commentary

The overall impression given by the FAOS analysis is that the collective bargaining system has been the major influential factor in determining trade union structure in Denmark. As long as this bargaining system has functioned in its current form, the pressure for change in union structures has been too weak to overcome the internal opposition to such change within the unions. Developments also show that changes in the bargaining system have an impact on the structure of the organisations involved. For example, this was evident in the public sector from the 1960s onwards, when an increasing number of employees employed under a collective agreement, in comparison with the number of employees with the status of public servants, led to increasing public sector trade unionism. This also became clear in the private sector from the end of the 1980s, when the member organisations of the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) changed their strategy and took the initiative to change the collective bargaining system, establishing new, more centralised sectoral organisations as a prerequisite for the conclusion of more framework-oriented agreements. The aim was that such agreements would open up the possibility of "coordinated decentralisation" of bargaining competence to the enterprise level, and thus a higher degree of flexibility.

This process of "centralised decentralisation" and the radical change of the organisational structure on the employer side has had an impact on the discussions within LO and has led to the introduction of new structural changes. So far, we have seen only the first phase of this process of change. Due, among other factors, to the continued trend towards globalisation of the economy, it seems that external pressure will make the employers continue their own process of structural change. A new wave of mergers and amalgamations of unions may thus be expected in the course of the next decade or so. (Carsten Jørgensen, FAOS)